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08.02.2007
Bond issue by «Istok-2001» LLC assigned uaBB credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBB long-term credit rating to issue of registered (housing) bonds (A-D series) by Odessa-based "Istok-2001" LLC ("the Issuer" or "the company") for the amount of UAH 169.6m, A series due 31 Dec. 2010, B and D series due 31 Dec. 2011, C series due 31 Nov. 2010. The main company`s activity is investment and construction. Today the company constructs residential buildings in the cities of Nikolayev and Odessa. In the course of analysis "Credit-Rating" used Issuer`s financial statements for 2001-2005 and 9M2006 as well as other inside information furnished by the company.
Issues rated uaBB are the least affected by the risk of non-payment within speculative grade. The obligor, however, may be impaired to timely and in full meet its commitments on the obligation in the Ukrainian financial market environment in the event of adverse changes in business, financial and economic conditions. However, the possibility of nonpayment is low in the near future.
Factors supporting the credit rating
- The company is incorporated into the group of companies with the production facilities allowing to supply the construction process on almost all stages, in fact over the past 7 years the group has constructed 15 residential buildings of 72.7K sq.m. (57.3K sq.m. the group constructed as a customer).
- The Issuer is designer, investor and customer of construction objects. The company has set in operation 10 residential houses of 49.4K sq.m. over the past 5 years.
- The construction objects to be financed by the funds raised from the bonds` placement are situated in the cities of Odessa and Nikolayev, where the real estate prices have been growing over the past few years.
Factors constraining the credit rating
- The Issuer has no experience in bonds` redemption.
- Company`s negative capital over 2001-2005 resulting from its detrimental activity.
- Volatility in legislation and taxation on operations connected with construction and with attraction of funding.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found in the REUTERS and BLOOMBERG information systems.
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
